Conducting a promotion to boost sales of your product or service can provide you with immediate results in higher profits, but it can have lingering effects that aren’t always positive. Business promotions typically are useful for short-term results but are not always the best way to achieve your long-term goals. While the results may tempt you to continue with specials and promotions, beware of the pitfalls of lingering promotional campaigns.

Image

Consumers often are leery of promotions and may begin wondering if there’s something wrong with your products or services when they see promotions that seem too good to be true. Consumers may question the validity of your business and suspect your product or service has not been selling well when you rely on promotions to build sales. Instead of building a positive brand image, you may actually be creating a negative image that can be difficult to overcome.

Pricing Expectations

If you rely on promotions to boost your sales, in effect you are telling customers that your service or product is overpriced in the first place. Savvy consumers wait for the promotions before they buy from you when they consistently see your specials and promotions. It can be difficult to raise prices back up once you’ve enticed the public with lower price points, reducing your profit margin substantially.

A300 mobile placeholder

High Demand

Special promotions can create a demand that you can’t keep up with, thus alienating the very customers you were trying to attract. Rebate promotions are an example of how promotional strategies can backfire, according to the website Reference for Business. Companies that didn’t plan well for an exceptional demand for rebates discovered that they could not process the rebates fast enough to satisfy consumers. As a result, rebates lost their appeal and often are seen as gimmicks instead of valuable money-saving options. The same is true of product sales when you run out of inventory mid-promotion. Consumers view the marketing as a ploy and tend to mistrust companies with exceptional promotions they believe won’t be honored.

Competition

Depending on what kind of promotion you use, you can spur additional price cuts from your competition, leading to permanent price reductions that affect your profit margin over the long term. If you venture into Internet promotions to spur business, for example, you run into the added disadvantage created by larger corporations that have the funds to pay for pay-per-click advertising and paid directory positioning. Unless you have a team of Internet specialists driving traffic to your site, you have to rely on additional advertising to drive business to your specific website. Meanwhile, you run the risk of exposing your clients to other options online they may view as they look for your site.

References

Photo Credits

Jupiterimages/Brand X Pictures/Getty Images

About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."